amendment340basicsfinal2014-.htm - Generated by SEC Publisher for SEC Filing







 





AMENDMENT TO 


NON-EXCLUSIVE SOFTWARE LICENSE AGREEMENT (InfoPointTM for
340Basics)


 


            GENEX
Consulting, LLC, having a place of business at 103 Carnegie Center, Ste. 300,
Princeton, NJ 08540 (hereinafter “GENEX”) and 340Basics Inc. having a place of
business at 66 Ford Rd #230, Denville, NJ 07834 (hereinafter “340Basics”),
having entered into a Nonexclusive Software License Agreement (“Agreement”),
said Agreement having been executed March 27, 2014 and made effective as of
January 2, 2014, desire to amend that Agreement to provide for an exclusive
license and to address other issues as set forth below, and Healthcare
Corporation of America (OTCQB: HCCA), 340Basics’ parent company having a place
of business at 66 Ford Rd #230, Denville, NJ 07834 (“HCCA”) desires to be added
as a party and to enter into this Amendment in order to induce GENEX to enter
into the same;


 


NOW, THEREFORE, in consideration of the mutual covenants
of the parties and for other good and valuable consideration, the parties hereto
hereby amend the Agreement as follows, this Amendment to be effective as of
June 1, 2014 (the “Exclusive Effective Date”):


 


1.
Subsection a) of Section 2 of the Agreement, entitled “LICENSE GRANT AND
OWNERSHIP OF LICENSED SOFTWARE” is deleted and replaced with the following:


a) Subject
to the terms of this Agreement, GENEX grants to 340Basics a worldwide,
exclusive, non-transferable limited license to use the Licensed Software in
connection with 340Basics Products. Nothing herein shall be considered to grant
any license to use the Licensed Software for any other purpose or in connection
with any other products, e.g., for Auditing,
Medicaid, Medicare and Revenue Recovery.  


 


Subsections
b) and c) of Section 2 are unchanged.


 


            2. 
Section 3 of the Agreement, the first section entitled “SOFTWARE HOSTING,
SUPPORT AND CONSULTING” which through an error duplicated the provisions of
Section 2, is deleted and replaced with the following language:  “[Section 3 is
intentionally omitted]”.


 


            3.
Section 5 of the Agreement, entitled “PAYMENT” is amended by adding additional
subsections e), f), and g) as follows: 








	
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            e)
Exclusivity Fee:  in addition to the payments in Section 5(a) above, 340Basics
will pay, at the times and in the manner set forth in this Section 5, an
Exclusivity Fee in the amount of:


 


(i)     5% of 340Basic Script Revenue,
plus 


 


(ii)   an additional 2% of 340Basics
Script Revenue from clients referred by GENEX, provided that such referrals are
documented in writing, via email from GENEX to 340Basics, and acknowledged by
340Basics.  


 


For
purposes of this Agreement, “340Basics Script Revenue” for a given period shall
mean the greater of:


 


(iii) total
cash receipts of 340Basics and its affiliates during such period that are
attributable to sales of 340Basics Products which utilize the Licensed Software,
net of reasonable discounts and adjustments actually given;  and


 


            (iv) 70% of the amount specified as “340Basics Script Revenue”,
corresponding to projected sales of 340Basics Products which utilize the Licensed Software,
net of reasonable discounts and adjustments, for such period in 340Basics’s annual budget (the
“Annual Budget”) in effect for such period, as approved by 340Basics’s Board of
Directors.  


 


When the
Exclusivity Fee is calculated based on total cash receipts as specified in the
foregoing clause (i), it shall be referred to as the Sales Exclusivity Fee, and
when the Exclusivity Fee is calculated based on the 70% of budgeted amount as specified
in the foregoing clause (ii), it shall be referred to as the “Minimum
Exclusivity Fee”. 


 


For as
long as this Agreement continues in effect, 340Basics, HCCA & GENEX will
work together to agree on the Annual Budget for each calendar year commencing
with the 2015 calendar year prior to the beginning of the relevant calendar
year (and in any event prior to such Annual Budget’s submission for approval to
HCCA and 340Basic’s Board of Directors).  For purposes of illustration, Table 1
provides a calculation of potential Exclusivity Fee payments for the years 2014
(June – December, based on the budget already approved by the Board) and 2015
(January – December, based on estimates but not approved by the Board):


 


	
  TABLE
  1:  Potential License Fee Payments 

  	 
	 	 	 	 	 
	
  Period

  	 	
   Revenues
  

  	
  Notes

  	 
	
  2014
  Budget

  	 	 	 	 
	
  June
  – December

  	 	
  
  $2,454,200 

  	
  Amount
  of projected 340Basic Script Revenue in budget - already approved by the
  Board

  	 
	
  Minimum
  Commitment

  	
  70%

  	
  
  $1,717,940 

  	 	 
	 	 	 	 	 
	
  Fees

  	 	 	 	 
	
  Minimum
  Exclusivity Fee

  	
  5%*

  	
  
  $85,897 

  	
  Amount
  payable for the period if cash receipts do not exceed 70% of budget

  	 
	 	 	 	 	 
	
  Per
  Budget Exclusivity Fee

  	
  5%*

  	
  
  $122,710 

  	
  Amount
  payable for the period if cash receipts equal 100% of 340Basic Script Revenue
  projected in the budget

  	 
	 	 	 	 	 
	
  2015
  Budget

  	 	
  
  $9,727,200 

  	
  Estimated
  amount of projected 340Basic Script Revenue in budget (NB: not yet approved
  by the Board)

  	 
	
  Minimum
  Commitment

  	
  70%

  	
  
  $6,809,040 

  	 	 
	 	 	 	 	 
	
  Fees

  	 	 	 	 
	
  –Minimum
  Exclusivity Fee

  	
  5%*

  	
  
  $340,452 

  	
  Amount
  payable for the period if cash receipts do not exceed 70% of budget

  	 
	
   

  Per
  Budget Exclusivity Fee

  	
  5%*

  	
  
  $486,360 

  	
  Amount
  payable for the period if cash receipts equal 100% of 340Basics Script
  Revenue projected in the budget

  	 
	 	 	 	
   

  * If GENEX brings in clients, it
  will be paid an additional 2% on receipts from such clients

  	 
	 	 	 	 	 










	
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f) Timing
of Exclusivity Fee payment:  Payments to GENEX of the Exclusivity Fee will be
made on a monthly basis in immediately available funds, according to the schedule
set forth in this subsection.  340Basics will make an Initial Payment to GENEX
of $12,300 (the average monthly Minimum Exclusivity Fee for 2014) upon
execution of this Amendment.  Upon termination of this Agreement or conversion
of the license granted under this Agreement to a nonexclusive license, pursuant
to Section 7(e), GENEX will first apply this Initial Payment of $12,300 to any
outstanding amounts owed by 340Basics or HCCA under this Agreement as of the
time of such termination or conversion, and then pay any balance remaining to
340Basics.  340Basics will pay by the 30th of each month following the end of
the prior month the Sales Exclusivity Fee or the Minimum Exclusivity Fee,
whichever is higher. On or before the 30th day of the month following
a quarter (so on or before October 30 for the quarter ending September, and so
forth), 340Basics and GENEX will true up the payments (either by payment from
340Basics or refund from GENEX) so that GENEX will have received (on a year-to-date basis through the end of such quarter; except that
for 2014, the basis will be the only period from June through December 2014), the
greater of (a) the total of the Minimum Exclusivity Fees due or (b) the total
of the Sales Exclusivity Fees due. An example of this calculation is set forth
on the spreadsheet attached hereto as Appendix A.







	
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            g)
Reporting and Auditing:  


 


(i)
GENEX will grant access to 340Basics to retrieve 340B Invoice Reports from the
information on the GENEX servers, such reports showing activity by customer
using the Licensed Software. 


 


(ii)
340Basics will provide GENEX with monthly reports showing the actual number of
scripts sold, the price per script, any revenues, discounts or adjustments
associated with sale of 340Basics Products, a calculation of the Sales
Exclusivity Fee and a calculation of the fee payment owed to GENEX. GENEX shall
have the right during the term of this Agreement and for three (3) years
thereafter, at its cost and expense to designate an authorized representative,
including without limitation, a firm of Certified Public Accountants to audit the
books and records of 340Basics and to conduct such further investigation as GENEX
shall deem necessary to verify 340Basic's performance of all its obligations
hereunder including, without limitation, payments due to GENEX under this
Agreement.  


 


(iii)
If, as a result of any examination of the books and records of 340Basics or the
340B Invoice Reports, it is determined that payments made under this Agreement
were less than or greater than the amount which should have been paid, 340Basics
and/or HCCA shall promptly pay the amount of any discrepancy or shortage to
GENEX, or GENEX shall refund any overpayment to 340Basics, as the case may be. 
Should the discrepancy or shortage of payment by 340Basics be the result of an
error, omission or other inaccuracy in information or reports provided by
340Basics, the payment of the amount of discrepancy or shortage shall bear
interest at 1.5% per month compounded monthly. 


 


 


 


 


 


 


 


 


 








	
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Section 5
of the Agreement, entitled “PAYMENT” is further amended by replacing item 5 in
subsection a) of such Section 5 with the following:


 


	
  5)
  User volume license fee for GENEX 340BasicsTM suite (Client Login,
  Member Login, Eligibility, Customer Service, FileShare)

  	
  ·        
  1 to
  124,999 end users (including members, patients and employees): Included in
  basic license fee above. 

  ·        
  125,000 -
  199,999:  Basic fee plus $0.20 per additional end user. 

  ·        
  200,000 and
  over:   Basic fee plus $0.15 per additional end user.

  




 


 


 


 


 


 


 


 


 


 


 


The
remainder of subsection a), as well as subsections b), c) and d) of Section 5
shall remain unchanged. 


 


            4. 
Subsection b) of Section 6 of the Agreement entitled “WARRANTY AND
INDEMNIFICATION” shall be deleted and replaced with the following:


b)         GENEX
Indemnity:  In the event that 340Basics is sued in a court of competent
jurisdiction for any claim that the Licensed Software, or its use as authorized
hereunder, infringes or misappropriates any intellectual property right of any
third party, GENEX will defend, indemnify and hold 340Basics harmless from and
against any and all claims, losses, liabilities, damages, costs, and expenses
(including reasonable attorney's fees). Genex warrants that it will take
reasonable precautions to encrypt transmissions and preserve the
confidentiality of users’ personal data and information.  Should any amounts be
payable by GENEX under this Section 6(b) indemnity, such amounts shall be first
offset against any unpaid fees payable by 340Basics and HCCA and then against
the current year’s minimum fees not yet paid.


  


All other
provisions of Section 6 shall remain unchanged.


 


5.
Section 7 of the Agreement, entitled “TERM AND TERMINATION” is amended by correcting
the reference in subsection (a) to “this Section 6” to “this Section 7” and by
deleting subsection c) and replacing it with the following:


 








	
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c)         Termination
for Convenience:  This Agreement may be terminated by either party at any time
after the fifth anniversary of the Exclusive Effective Date, upon three months
written notice, provided that if the termination is by 340 Basics, all payments
due hereunder must have been made through the effective date of termination.


 


Section
7 of the Agreement is further amended by adding the following subsection:


e)  Conversion
to Nonexclusive:  in addition to any other rights available under this Section
7 or any other provision of this Agreement:


 


(i)     if 340Basics or HCCA is at any
time delinquent for a period of 60 days or more in paying the Exclusivity Fee, any
payments due under Section 11 hereof, or other payments due to GENEX under this
Agreement, or if HCCA fails to comply with GENEX's exercise of its option to
receive 10% Secured Convertible Debentures of HCCA under Section 11
hereof;


 


(ii)   if the amount of the “340Basic Script Revenue” is less
than Five Million Dollars ($5,000,000) for 2015 or any calendar year thereafter;



 


(iii)  at any time after the fifth anniversary of the
Exclusive Effective Date; and 


 


(iv)  if 340Basics or HCCA become insolvent or
declare bankruptcy; or


 


(v)   if 340Basics undergoes a change
of control of the 340Basics business (whether by sale or transfer of
substantially all assets or business of 340Basics or by sale
or transfer of a majority of stock in 340Basics or HCCA) wherein (a)
such change of control is without prior written consent by GENEX, such
consent not to be unreasonably withheld, and (b) such change of
control is a change of control which requires approval of the Board(s) of
Directors of 340Basics and/or of HCCA after the date hereof; 


 


then GENEX
shall have the right to amend the Agreement to convert the license granted
hereunder to a nonexclusive license, effective immediately upon written notice
to 340Basics, by amending Subsections 2(a), 5(e), 5(f), and 7(c), such that Subsections
2(a) and 7(c) of the Agreement will prospectively revert to the original terms
of the Nonexclusive
Software License Agreement as executed March 27, 2014, and new Subsections 5(e) and 5(f) will cease to have
effect prospectively.  


 


All
other provisions of Section 7 shall remain unchanged.


 


            6. 
The Agreement is further amended to add the following Section 11:


 


11. 
DEBT OF 340BASICS AND HCCA TO GENEX.



 


a) Each of 340Basics and HCCA hereby
acknowledges and agrees that the balance of 340Basics’ and HCCA’s payment obligations
to GENEX that are due and payable as of May 31, 2014
(the “Outstanding Balance”), which Outstanding Balance is hereby acknowledged
by each of 340Basics and HCCA to be equal to approximately $380,000, remains
outstanding and due and payable on demand, by 340Basics and HCCA jointly and
severally, and that such Outstanding Balance is not satisfied, discharged or
otherwise affected by this Amendment.  







	
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b) At the
option of GENEX, GENEX may elect to receive, at any time prior to June 7, 2014
and in satisfaction and discharge of a $175,000 portion of the Outstanding
Balance, 10% Secured Convertible Debentures of HCCA in the aggregate principal
amount of $175,000.00, with 100% detachable warrant coverage, to be issued to
GENEX by HCCA on the terms and conditions set forth in debenture and warrant
documentation substantially in the form furnished by HCCA to GENEX on May 31,
2013, with such modifications as GENEX and HCCA may mutually agree in writing
(and for the avoidance of doubt, such option of GENEX will remain in effect at
all times prior to June 7, 2014 notwithstanding any earlier payment of such
balance, or any portion thereof, to GENEX), with the remaining balance of
approximately $205,000 to be paid over 9 months, in equal installments due on
the first day of the month, starting July 1, 2014.


 


c) The May
31st, 2014 outstanding remaining balance will be calculated and
agreed upon by the parties by June 15, 2014.


 


7.  HCCA
and 340Basics, as parties to this Agreement, shall be jointly and severally
liable for all payment obligations under this Agreement, including without
limitation all payments due under Section 5 and under Section 11, and wherever
in the Agreement there is a reference to an obligation by 340Basics to make a
payment, it is understood and agreed that HCCA is jointly and severally liable
for such obligation; provided, however, that no license is granted hereunder to
HCCA with respect to any products other than 340Basics Products.


 


            8.
All provisions of the Agreement shall remain in force except as expressly
modified by this Amendment.


 


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IN
WITNESS WHEREOF, the Parties have executed this Amendment to
the Nonexclusive
Software License Agreement, as
of the Exclusive Effective Date.  All signed copies of this Agreement shall be
deemed to be originals.


 


GENEX Consulting, LLC                           340Basics
Inc


 


 


/S/ Anula Curtis                                              /S/
Natasha Giordano                          


Signature                                                         Signature


 


                                                                                                                                                


Name: Anula Curtis                                        Name:
Natasha Giordano


 


                                                                                                                                                


Title: Managing Director                                 Title:
CEO


 


                                                                                                                                                            


Date:
June 6, 2014                                          Date: June 6, 2014


 


Healthcare Corporation of America                                   


 


 


/S/ Natasha Giordano  


Signature                                                         


 


                                                                        


Name: Natasha Giordano                                                                   


 


                                                                        


Title: CEO                                                                   


 


                                                                        


Date:
June 6, 2014                                                                                                                              


 


 


 











	
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